Journeys towards effectiveness—how foundations can do good, better Tris Lumley Head of Development, New Philanthropy Capital

What is effectiveness? “Independent foundations have an unique role to play… Relatively unconstrained by the absence of a profit motive, political imperatives or fundraising necessities, foundations have a responsibility to maximise their independence for the public good.” Clare Thomas MBE, Chair—Association of Charitable Foundations “Effective here is defined as achieving the ends which a foundation has set for itself. (Though, given the freedom of foundations generally to create their mission, this also implies the ability of a foundation to set itself worthwhile, meaningful goals). David Cutler, Director—Baring Foundation The effective foundation—A literature review, Baring Foundation, 2009 An alternative picture of effectiveness – it’s about fusing the heart and the head successfully Do what you’re passionate about But do it well

What is effectiveness? Are you getting to your destination? It is possible to judge how well you’re doing …but it depends where you’re starting from

Funders are part of a cycle Is it about telling stories about how you help, inspiring supporters, letting people but into your vision

What is effectiveness?

What is effectiveness?

What is effectiveness? Achieving change in people’s lives Addressing real and difficult problems Changing society for the better Not just about good news stories Or just numbers and statistics About both – doing good, better Achieving the greatest possible change

Some foundations set out to be at the cutting edge of effectiveness CIFF’s current strategy for children was developed throughout 2008 and began implementation in earnest in 2009. With an overarching devotion to high impact funding for children, there are now three central tenets to CIFF’s approach. The first is clarity around success — articulating clearly the impacts we seek overall and precision around how individual grants provide a highly strategic path to these. The second is the explicit use of data — guiding CIFF’s investments based on facts about where the most salient opportunities for children exist, establishing explicit programme targets premised on existing evidence or a sound hypothesis and measuring ongoing progress towards these objectives and ultimate success with reliable data. The third is active learning and adaptation of strategy within each programme, as well as within CIFF, to better optimise impact. ... CIFF recognises that our approach is a substantial divergence from the norm of development funding. The truth is that implementing this strategy is proving exciting, challenging and, often, uncomfortable. We recognise many outside the organisation are skeptical that a donor can successfully marry the acumen and discipline of the private sector with the best thinking and evidence of what works in development. ... Our hope is that CIFF’s journey will be useful for all who aim to make development more impactful.

What is an effective foundation?

But do you need to aim to create systemic change to be effective? What does effectiveness mean if you’re a small foundation, or individual donor? There are different paths towards effectiveness, depending on where you start from But there is a problem you can’t ignore …doing good is NOT good enough

Why effectiveness matters If you’re not focused on effectiveness At worst, you risk doing harm At best, you miss opportunity to do most good

A family foundation began its journey by experimenting with what worked What worked for the foundation – passions, interests, what felt right What worked in terms of social impact – driven by NPC’s due diligence, proportionate reporting Comprehensive review after the first cycle, leading to narrowing down focus areas, increasing investments, increasing engagement

A venture philanthropy foundation strengthens effective NPOs

The Gates Foundation works to eradicate polio globally

Foundations’ journeys towards greater impact and effectiveness

You don’t have to be the Gates Foundation to be effective Start from your objectives …and where you are today Decide whether you care about effectiveness Implement practices that Seek out effectiveness (in the NPOs you support) Build your effectiveness

What does effectiveness mean for foundations? Answer the five questions to focus on your effectiveness What’s the problem you’re trying to address? What do you do to address it? What are you achieving? How do you know? How are you learning and improving?

What does effectiveness mean for foundations? To answer the questions you’ll need Clear objectives Defined strategy to achieve them Track progress towards them Gather evidence of progress/impact Review, learn, improve and communicate

Effectiveness means… Clear objectives Defined strategy to achieve them Foundation’s vision & mission Defined programme areas Defined strategy to achieve them Making donations? Playing active, public role as foundation? Strengthening NPOs & sector?

Effectiveness means… Defined strategy Identify NPOs aligned with objectives Donations to effective NPOs Appropriate type of funding Support to improve NPOs? Smart processes

How to identify effective NPOs Research to set context Scan to identify shortlist Application/due diligence process to assess effectiveness Sector research Needs; Opportunities for foundations; Effective approaches; Evidence base Assess effectiveness Identify prospects NPOs delivery best approaches Select NPOs

What is an effective NPO?

How do foundations identify effective NPOs? Proactive research Application process looks for evidence of Theory of change Objectives Measurement framework Evidence of impact

Effectiveness means… Track progress Gather evidence of progress/impact Reporting framework designed to help NPOs capture what they need on impact Gather evidence of progress/impact Big picture—is the needle moving? NPOs’ impact Foundation’s impact

Effectiveness means… Review, learn, improve & communicate Are foundation’s objectives being met? How can the approach be improved? How can NPOs improve? Communicating foundation’s impact

If you take effectiveness seriously, how can you get started? Review your approach Get help with Planning – sector research, identifying NPOs Funding – advice on grant-making, providing support Measuring – your approach, reporting by NPOs Reviewing – evaluating, learning & communicating Talk to others Who are your peers, and what can you learn/share?

Tris Lumley New Philanthropy Capital tlumley@philanthropycapital.org tris.lumley (skype) www.philanthropycapital.org